Agri Business

Upasi opposes move for duty free imports of tea

Our Bureau Kochi | Updated on August 11, 2020

The United Planters Association of South India (Upasi) has strongly objected to the move to tinker with the import duty structure for tea, saying that it will be counter-productive.

RM Nagappan, Upasi President, 50 per cent of tea production in the country is by small growers and any such move to reduce the import duty, which is currently at 100 per cent, will be detrimental to the interest of growers and workers.

His reaction comes in the background of reports that Tea Traders/Packeteers have sought duty free imports of tea in the context of marginal increase in prices due to lower production.

Nagappan said that Indian tea production till June was lower mainly due to initial lockdown measures. This has led to some increase in the prices since mid-June 2020, which was very much needed for the sustenance of the industry. The decline in the production till June was just 8.9 per cent of the total tea production in the country. India being a surplus tea producing nation, exports around 18-20 per cent of its production.

However, due to the pandemic, exports from India are down by 26.98 million kg in 2020 (January-May) and this quantity is available in the domestic market. As the out of home consumption (HORECA segment) is also being affected, the decline in production is no way significant from the consumption point of view.

The price increase witnessed in the last few sales does not substantiate the duty reduction argument as the price increase for the period January to June in South India was lower by 9.4 per cent and for the rest of the country, the prices were lower by 11.4 per cent (January-May). Hence, the demand for duty reduction appears to be a ploy to jolt the present market sentiments, he added.

Published on August 11, 2020

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